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When Kent County commissioners first saw the county's annual investment report, it probably reminded them of their personal 401(k) statements.

Just like individual investors, the funds the county manages for itself and other public entities also lost ground last year. One reason was interest income was down. But not every dollar in the smaller account balance was lost due to the horrible conditions in the financial market last year, as some was withdrawn and spent.

During 2008, cash and investments fell by 18.6 percent from the previous year or roughly $88.3 million. (See related chart.)

That decline was led by a 44 percent drop in the pooled investment category, one of the county's three investment types. The balance in that account fell by $54 million, from $122 million to $68 million, and that fall represented 65 percent of the total $88 million decline in account balances from 2007 to 2008.

But one fund in the pooled category was injected with $120 million in 2007 — cash from a bond sale to finance the renovation project now going on at Gerald R. Ford International Airport. County Treasurer Kenneth Parrish told commissioners last year that funds from the Bayerische GIC account would be drawn down in 2008 to pay for construction of the new parking ramp and other work that is part of the airport project. And that has happened.

The Bayerische fund had a balance of $117 million at the start of 2008 and stood at $44 million at the end of the year, a difference of $73 million and a drop of 62 percent as the airport project got going last year.

Most of the public money is invested in certificates of deposit and money-market accounts at 26 banks in the county. Parrish doesn't make deposits with investment banks or in commercial paper. He said he hasn't done any business with credit unions because none have asked him to invest.

"They've never approached me," he said.

Parrish said he felt the county's bank investments were as safe as anyone's. He said only a few small Michigan banks have been taken over by the Federal Deposit Insurance Corp. and the FDIC has had a successor bank in place before each closing.

"We watch them extremely close," said Parrish of the local banks. "I have confidence that these (banks) are sound. We're as safe as we can be in this turbulent time."

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